BB Smoothens Procedures for Foreign Investment

Bangladesh Bank will allow foreign investors to deposit their dividends with the foreign currency (FC) accounts maintained with banks in the country under certain conditions.

A Bangladesh Circular, released on Tuesday (July 7) by the Foreign Exchange Policy Department said that in order to ensure a smooth activity of foreign investment in Bangladesh, it was agreed that dividends payable to foreign shareholders may be credited to their FC accounts held in Bangladesh, subject to certain directions.

These involve the requirement that the approved dealers (AD) appointed banks are pleased that the fund in equal foreign currency to be credited in the FC accounts for the dividend has arrived in compliance with the Guidelines for Foreign Exchange Transactions (GFET) and that it has been registered.

“While crediting FC accounts, the transactions shall be treated as outward remittances and accordingly TM Form procedures need to be followed," said the BB circular.

Encasement of balances held in FC accounts shall be treated as inward remittances for bonafide local disbursements, subject to Form-C procedures, said the circular.

BB said that purchase of shares out of funds held in FC accounts shall be treated as foreign investment, subject to compliance with the instructions of the GFET.

The declared dividend may be used, with treatment as inward remittances in accordance

with GFET, for reinvestment in Bangladesh through the purchase of shares in existing companies and/or other companies subject to observance of following certain instructions.

The Circular stated that the investor companies shall, within 14 days of the issue of shares in compliance with the regulatory norms, arrange for the attachment of the related documents to the Foreign Exchange Investment Department and the Statistics Department of Bangladesh Bank by means of their designated Advertisements.